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Microsoft/Xbox rocked the game industry today by announcing its plans to acquire Activision Blizzard for $68.7 billion. Activision has been embattled with numerous sexual harassment and discrimination lawsuits, multiple employee walkouts, and a strike at Raven Software with CEO Bobby Kotick at the center of it all.
Today’s acquisition immediately raised questions on whether or not Kotick will remain CEO in the wake of these ongoing controversies, with Microsoft confirming he will still lead Activision for the time being. Kotick himself has not explicitly discussed his future post-acquisition, but it’s worth keeping in mind that, generally, such management changes can’t be openly disclosed until after the deal is finalized. Kotick did, however, pen a letter to Activision Blizzard employees rationalizing the sale and how Microsoft can improve the company.
One important detail Kotick points out is that the transition will take some time to complete. He points to Microsoft’s fiscal year of 2023 ending on June 30 as the estimated timeframe for the full approval process to wrap up. Until then, Activision will continue to operate independently.
Kotick hopes Microsoft’s expertise in technologies such as cloud computing and AI machine learning will support Activision's existing plans. Kotick previously cites the growing competition around the metaverse concept, alluding that Microsoft will be a big help making their mark in that space.
In terms of Activision’s cultural problems, Kotick also points to Microsoft’s philosophy of employee caring as another selling point and hopes it will help inspire to continue to improve its own internal issues. Xbox head Phil Spencer alluded to a similar mantra of helping problematic studios be better instead of only punishing them when he was recently interviewed about the state of Activision.
You can read the full letter below:
Team,
Today is an incredibly exciting day. As we continue our journey to connect and engage the world through epic entertainment, we will eventually do so as part of Microsoft. I am certain that our incredible talent and extraordinary games combined with our shared commitment to the very best workplace will enable us to grow in an increasingly more competitive race for leadership as gaming through the metaverse evolves.
How we got here and where we’re going
When you reflect on what we’ve built together, we have so much to be proud of. For the last 31 years, we’ve continuously shaped gaming through our commitment to deliver joy, fun, and the thrill of accomplishment.
We’ve transformed games into social experiences and enabled players to find purpose and meaning through the most engaging form of entertainment – our games. By doing so, we’ve created and entertained communities of hundreds of millions of players.
Connecting these communities together is the next step. Facebook, Google, Tencent, NetEase, Amazon, Apple, Sony, Disney – and many more – have ambitions for their own gaming and metaverse initiatives. Established and emerging competitors see opportunity for virtual worlds filled with professionally produced content, user generated content and rich social connections.
Our talent and our games are important components of the construction of a rich metaverse. We have always attracted the very best game makers and built the very best games, seizing opportunity with passion, inspiration, focus, and determination.
A partnership to define the future
As investments in cloud computing, AI and machine learning, data analytics, and user interface and experience capabilities are becoming more competitive, we believe this partnership will better enable our ambitions.
In considering possible partners, all roads ultimately lead to Microsoft. Like us, they have been making games for a long time. Microsoft has already distributed games to hundreds of millions of the world’s computers and computing devices and has technologies and innovation that will support the next generation of games.
Microsoft also will support our journey to further strengthen our culture. Satya Nadella, Microsoft’s CEO, has been a passionate advocate for caring as the currency of leadership. Inspiring people through empathy is a powerful motivator, and one we embrace as we renew our resolve – and in the work we are now doing – to set a new standard for a welcoming and inclusive workplace culture.
Importantly, Microsoft wants you – your talent, your creativity, and your dedication to each other. Activision Blizzard’s success throughout the years can be directly attributed to each of you. Microsoft recognizes the commitment to excellence and creative independence that sets us apart, and we anticipate minimal changes for our workforce following the close of the transaction. Microsoft’s diverse operations will give us access to valuable expertise, technology, and tools and provide even greater opportunities for learning and development.
No organization’s culture, including ours, is without need for improvement, and thanks to your input, we are making strides in improving ours. My commitment is to continue evolving our culture so that come closing, Microsoft is acquiring an exemplary workplace.
What’s next
Transactions like these can take a long time to complete. Until we receive all the necessary regulatory approvals and other customary closing conditions are satisfied, which we expect to be sometime in Microsoft’s fiscal 2023 year ending June 30, 2023, we will continue to operate completely autonomously. I will continue as our CEO with the same passion and enthusiasm I had when I began this amazing journey in 1991.
Of course, this announcement will give rise to so many questions. We will host numerous forums and events to make certain we address your concerns.
I am incredibly proud of this company, you, and the work we have done together. Now it’s on to our next chapter and the endless possibilities this transaction represents for us. I couldn’t be more appreciative of your efforts, focus, and the dedication to connecting the world through joy and fun.
With gratitude,
Bobby
Kotick's future with Activision has been a big question mark since it was revealed he reportedly obsurced years worth of employee abuse reports from Activision Blizzard shareholders. At one point, he himself stated he would consider stepping down if company culture didn't approve, although employee petitions and a minority of shareholders have called for him to resign as well.
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